SMELLIE SNIFFS THE BREEZE: Jumping at trade shadows

SMELLIE SNIFFS THE BREEZE: Jumping at trade
shadows

One
set of economic analysis disagrees with another about what
the future might hold.

Next we’ll be hearing that
nobody’s quite sure who will win this year’s general
election! Still, the future’s like that.

Such
uncertainty is writ large in what passes for debate in New
Zealand about the Trans-Pacific Partnership trade treaty,
which is wending its way slowly either to resolution in the
first half of this year, or the second half, or possibly
never. Who knows? It’s all a bloody secret.

The way the
story’s told here, the TPP is a plaything of US corporate
interests hell-bent on imposing the very worst of American
imperialist views on such important principles as the
ownership of patents and copyright, at the expense of
supposedly “weak” negotiators like New Zealand.

The
implication is that the US political-industrial machine is
driving this outcome not just inexorably, but inevitably to
a conclusion that will only benefit existing corporate
power.

Well, maybe.

But if that’s really the case,
why is it that hardly a day passes without coverage in the
US media of the mounting trouble that US President Barack
Obama faces in getting the permission he needs from Congress
and the Senate to agree to a TPP-style deal?

If anything,
the political dynamic in the US indicates that vast economy
is becoming more instinctively protectionist and unwilling
to grant the “fast-track” legislation required to allow
the US to be a nimble participant in the TPP negotiations.
They now involve 13 trading nations around the Pacific Rim,
and perhaps a 14th if South Korea is allowed to join
too.

In the last fortnight, Obama has lost support for
fast-track legislation from the Democrat Leader of the
Senate Majority, Harry Reid, but a swathe of other leading
Democrats. On the Republican side, where liberal sentiment
towards global trade might have been expected to reign,
hard-right Tea Party-ites have further eroded support for
free trade.

Indeed, no US President has managed to secure
fast-track legislation since 2002. Efforts since 2007 by
both the George W Bush and Obama administrations to renew
fast-track authority have foundered to date.

So if TPP’s
most ardent critic in New Zealand, University of Auckland
law professor Jane Kelsey, is right and the Pacific Rim
trade deal is a stitch-up between evil US corporate
interests and its puppets on Capitol Hill, then clearly the
puppet-masters are doing a pretty crappy job.

The recent
Wiki-Leaked documents from TPP negotiations suggest much the
same thing. They show the US on the backfoot on many of the
most contentious intellectual property and environmental
issues.

Recent US media reporting suggests the US is
facing opposition to proposed environmental safeguards that
developing economies regard as trade barriers dressed up as
principle.

If anyone is succeeding on Capitol Hill at
present, it would seem to be American trade unions, who
would much rather kick TPP negotiations beyond the 2014
mid-term US elections later this year because they fear
trade liberalisation will cost the Democrats
votes.

Meanwhile, in New Zealand, economist Geoff Bertram
and Sustainability Council executive director Simon Terry
have published analysis questioning the roughly $5.5 billion
benefit the Government claims could come our way from the
TPP.

Bertram is perhaps best-known as a critic of
electricity reforms and Terry as a critic of climate change
and genetic modification policies.

In essence, they
suggest that projections of the deal’s value by a range of
internationally reputable economic consultancies are part of
the hand-holding conspiracy going on among global elites to
cook up a case for the TPP.

Quite rightly, they say we
can’t know what the effects of the TPP will be. Without
offering their own deep analysis, they suggest the benefits
may be as little as a quarter of those projected, and that
these haven’t been offset against the potential costs of
the deal.

However, their 27 page critique ends on a
lamentably weak note. The best they can posit is that:
“whether there would ultimately be a net gain for the
peoples of the TPP partner countries seems doubtful at this
stage. A proper accounting will be possible only when a
full text is available.”

Well, thankfully, there will be
such a text available before any of the Parliaments of TPP
member countries ratify the treaty, assuming democracies
ever allow it to arrive for ratification. Perhaps it will
be a fait accompli by then, but don’t bet on it. The
likelihood is that there will be several years of political
wrangling to get an agreed TPP in place.

In the process,
exactly what might be gained or lost should become clearer.

But it will still be a guess.

In particular, we will
all be able to see whether the much-hyped ability of
corporations to sue governments is really quite as powerful
as it’s being made to sound. Note: suing doesn’t mean
winning, and governments will still be governments; just as
they are now and have been whenever they sign international
agreements, which by definition cede a nation’s
sovereignty.

The criticism is that the TPP negotiations
have been too secretive for their own good. That is
inescapably true.

The voices in opposition to it have
almost free rein in the global media compared to the muted
public support it engenders from parties close to the
action. They are relying on elite status for progress: a
dangerous thing to rely on in uncertain times.

Indeed, it
is arguably exactly that secrecy and unwillingness to engage
that has allowed much of the paranoia surrounding the TPP
proposal to
flourish.

The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.

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